iMarketing Solutions Group Inc.
TSX VENTURE : XDM

iMarketing Solutions Group Inc.

November 30, 2010 19:16 ET

iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated) Reports Third Quarter September 30, 2010 Results

CALGARY, ALBERTA--(Marketwire - Nov. 30, 2010) - iMarketing Solutions Group Inc. (TSX VENTURE:XDM) -

Period ended September 30 Three months Nine months
  2010 2009 2010 2009
($ 000's, except per share amounts)        
Revenue $ 21,321 $ 22,317 $ 67,146 $ 69,931
Gross Margin 4,769 5,298 17,280 16,234
Net earnings (loss) (632) 697 553 1,951
EBITDA (480) 1,389 1,862 4,110
EPS, fully diluted $ (0.02) $ 0.03 $ 0.02 $ 0.08
EBITDA, per share, fully diluted $ (0.01) $ 0.05 $ 0.06 $ 0.16
         
*EBITDA – Net Earnings before income taxes, interest, depreciation and amortization. Since Gross Margin, EBITDA and diluted EBITDA per share have no standardized GAAP meaning, the comparability of these amounts to other enterprises may not be possible if the basis of calculation of differs.

iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated), a North American specialty entertainment and relationship marketing company, today reported its financial results for the three and nine months ended September 30, 2010.

Net loss for the three months ended September 30, 2010 amounted to $632 thousand or $(0.02) per diluted share. This compares to the net earnings for the three months ended September 30, 2009 of $697 thousand or $0.03 per diluted share. Similarly, net earnings for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 were $553 thousand or $0.02 per diluted share and $1,951 thousand or $0.08 per diluted share respectively.

Revenues for the three months ended September 30, 2010 amounted to $21,321 thousand compared to $22,317 thousand for the three months ended September 30, 2009, a decrease of $996 thousand, primarily resulting from revenue increases from the recently merged operations of The Responsive Marketing Group Inc. (RMG) which were more than offset by revenue decreases in the US operations attributable to increased consumer resistance.

There was negative EBITDA in the three month ended September 30, 2010 in the amount of $480 thousand compared to EBITDA for the three months ended September 30 , 2009 of $1,389 thousand. For the nine months ended September 30, 2010 and 2009, EBITDA amounted to $1,862 thousand and $4,110 thousand respectively.

iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated) is one of North America's leading relationship-marketing concerns and producers of cause related entertainment events. The Company's success is attributable to proprietary sales tools including technologically advanced teleservices and sophisticated customer databases. The Company has over 400 clients and 1,900 employees in over 25 offices across North America.

Certain statements in this press release may constitute "forward looking statements" reflecting our current beliefs, plans, estimates and expectations. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or the combined companies to be materially different from any performance or achievement expressed or implied by such "forward looking statements". Except as required by applicable securities laws, we undertake no obligation to update any forward looking statements for any reason after the date hereof to conform these statements to actual results or to changes in our expectations.

iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated)
Consolidated Balance Sheets September 30, 2010   September 30, 2009   December 31, 2009
('000s) (Unaudited)   (Unaudited)   (Audited)
           
Assets          
Current assets          
           
Cash and cash equivalents $ 2,521   $ 2,615   $ 3,445
Accounts receivable, net of allowances 10,168   6,671   6,555
Income taxes recoverable 263   -   -
Prepaid expenses and other current assets 1,311   1,120   959
Due from related party -   1,417   -
Future income taxes 746   570   332
           
  15,009   12,393   11,291
           
Equipment 3,412   2,493   2,298
Future income taxes 1,697   2,567   2,059
Intangible assets 373   58   57
Goodwill 1,812   1,105   1,064
           
  $ 22,303   $ 18,616   $ 16,769
           
Liabilities          
Current liabilities          
           
Bank indebtedness $ 1,070   $ 316   $ 63
Accounts payable and accrued liabilities 5,495   4,846   4,969
Income taxes payable 244   197   66
Current portion of long term liabilities 417   91   89
Future income taxes 858   715   838
Due to related party 400   1,747   -
           
  8,484   7,912   6,025
           
Long term debt 227   1   -
Future income taxes 121   34   -
Deferred tenant inducement 79   160   139
           
  8,911   8,107   6,164
Shareholders' equity          
           
Share capital 11,113   8,827   8,765
Contributed surplus 646   628   646
Accumulated other comprehensive income (3,769)   (3,424)   (3,655)
Retained earnings 5,402   4,478   4,849
           
  13,392   10,509   10,605
           
  $ 22,303   $ 18,616   $ 16,769
iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated)
Consolidated Statements of Operations and Retained Earnings
('000s, except per share amounts)
  Three Months Ended   Nine Months Ended
  September 30   September 30
  2010   2009   2010   2009
  (unaudited)   (unaudited)   (unaudited)   (unaudited)
               
Revenue $ 21,321   $ 22,317   $ 67,146   $ 69,931
               
Cost of revenue 16,552   17,019   49,866   53,697
               
               
Gross margin 4,769   5,298   17,280   16,234
               
Corporate expenses              
               
Branch overhead and corporate administration 5,249   3,909   15,418   12,124
Interest expense 31   25   72   106
Amortization of equipment 333   221   952   716
Amortization of intangible assets 2   2   6   6
               
               
  5,615   4,157   16,448   12,952
               
               
Earnings (loss) before income taxes (846)   1,141   832   3,282
               
Income tax expense (recovery)              
Current income tax (recovery) expense (4)   134   325   164
Future income tax (recovery) expense (210)   310   (46)   1,167
               
               
  (214)   444   279   1,331
               
               
Net (loss) earnings (632)   697   553   1,951
               
Retained earnings, beginning of period 6,034   3,781   4,849   3,027
               
Dividends paid -   -   -   500
               
               
Retained earnings, end of period $ 5,402   $ 4,478   $ 5,402   $ 4,478
               
               
Basic net earnings (loss) per share $ (0.02)   $ 0.03   $ 0.02   $ 0.08
               
               
Diluted net earnings (loss) per share $ (0.02)   $ 0.03   $ 0.02   $ 0.08
               
               
Basic weighted average number of shares outstanding 33,379   24,985   31,414   25,042
               
               
Diluted weighted average number of shares outstanding 33,560   25,845   31,634   25,376
               
 
 
iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated)
Consolidated Statements of Contributed Surplus
('000s)
  Three Months Ended   Nine Months Ended
  September 30   September 30
  (unaudited)   (unaudited)
  2010   2009   2010   2009
               
Balance, beginning of period $ 646   $ 628   $ 646   $ 558
               
Discount on share repurchase from book value -   -   -   70
               
Balance, end of period $ 646   $ 628   $ 646   $ 628
 
 
iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated)
Consolidated Statements of Comprehensive Income
('000s)
  Three Months Ended   Nine Months Ended
  September 30   September 30
  (unaudited)   (unaudited)
  2010   2009   2010   2009
               
Net earnings for the period $ (632)   $ 697   $ 553   $ 1,951
               
Foreign currency translation adjustment from self sustaining foreign operations (94)   (501)   (114)   (1,035)
               
Comprehensive income (loss) $ (726)   $ 196   $ 439   $ 916
               
 
 
iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated)
Consolidated Statements of Accumulated Other Comprehensive Income
('000s)
  Three Months Ended   Nine Months Ended
  September 30   September 30
  (unaudited)   (unaudited)
  2010   2009   2010   2009
               
Balance, beginning of period $ (3,675)   $ (2,923)   $ (3,655)   $ (2,389)
               
Foreign currency translation adjustment from self sustaining foreign operations (94)   (501)   (114)   (1,035)
               
Balance, end of period $ (3,769)   $ (3,424)   $ (3,769)   $ (3,424)
 
 
iMarketing Solutions Group Inc. (formerly Xentel DM Incorporated)
Consolidated Statements of Cash Flows              
('000s) Three Months Ended   Nine Months Ended
  September 30   September 30
  (unaudited)   (unaudited)
  2010   2009   2010   2009
               
Cash flows from (used in) operating activities              
               
Net earnings (loss) for the period $ (632)   $ 697   $ 553   $ 1,951
               
Non cash transactions reflected in net earnings              
Amortization 335   223   958   722
Future income tax expense (recovery) (210)   310   (46)   1,167
Adjustment for non cash tenant inducement rent credit (21)   (21)   (61)   (63)
               
  (528)   1,209   1,404   3,777
               
Net change in non cash working capital items              
Accounts receivable 118   447   (1,040)   (130)
Prepaid expenses and other current assets (17)   228   (152)   617
Income taxes payable / recoverable 11   170   525   (110)
Accounts payable and accrued liabilities 479   (16)   (345)   (771)
               
Net change in non cash working capital items 591   829   (1,012)   (394)
               
               
  63   2,038   392   3,383
               
               
Cash flows from (used in) financing activities              
               
Bank indebtedness (657)   (360)   (814)   240
Due to related party (repaid) received -   (355)   300   (1,270)
Long term debt repaid (85)   (2)   (200)   (64)
Repurchase of share capital -   -   -   (28)
Dividends paid -   -   -   (500)
Issuance of share capital on option exercise -   -   33   -
               
  (742)   (717)   (681)   (1,622)
               
Cash flow (used in) investing activities              
               
Investment in equipment (173)   (200)   (599)   (353)
               
               
Effect of exchange rate fluctuations on cash balances (23)   (100)   (36)   (158)
               
               
Net increase (decrease) in cash and cash equivalents (875)   1,021   (924)   1,250
               
Cash and cash equivalents, beginning of period 3,396   1,594   3,445   1,365
               
               
Cash and cash equivalents, end of period $ 2,521   $ 2,615   $ 2,521   $ 2,615

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Contact Information

  • iMarketing Solutions Group Inc.
    Caren Holtby
    Investor Relations
    866-204-9861
    416-633-4643 (FAX)